Photographer: David Ryder/Bloomberg

Canada Calls Boeing's Trade Challenge ‘Lousy Customer Relations’

  • Ambassador David MacNaughton wades into aerospace spat
  • Dispute illustrates growing tensions amid Nafta renegotiation

Boeing Co.’s pursuit of a trade complaint against Canadian rival Bombardier Inc. at a time it’s negotiating with the government on a major sale of military aircraft is “lousy customer relations,” Canada’s ambassador to the U.S. said.

Boeing alerted Canada shortly before the company petitioned the U.S. to probe whether Bombardier’s C Series aircraft is being sold at unfairly low prices, Ambassador David MacNaughton said Sunday on CTV’s “Question Period,” calling the action “strange.”

“I told Boeing pretty directly that I thought it was pretty lousy customer relations to give us one hour’s notice before they had the Commerce Department launch this kind of investigation,” MacNaughton said.

MacNaughton’s rebuke reflects the growing trade tensions between the neighbors since the election of President Donald Trump, who campaigned on a promise to renegotiate the North American Free Trade Agreement and notified Congress last week he plans to do just that. On Thursday, Canada’s Foreign Minister Chrystia Freeland said Chicago-based Boeing’s petition is clearly aimed at blocking Bombardier’s new aircraft from the U.S. market and hinted at retribution.

Long-Time Partner

Boeing values Canada as a customer and supplier, and the company’s partnership with the nation dates back to 1919, spokesman Peter Pedraza said in an emailed statement. The planemaker consistently places “substantial” amounts of commercial and defense work in Canada and has a supply chain that leverages the depth of the Canadian aerospace industry, he said.

Some U.S. companies that have spouted “trade protectionist rhetoric” need to start thinking of the integrated supply chains between the two nations and realize that “Canada is a pretty big customer,” MacNaughton said. The ambassador said millions of jobs on both sides of the border depend on open trade and Canada and the U.S. will “find a way to make it work” during Nafta renegotiations.

The Trump administration is likely to take a harder line against imports, and the trade case against Bombardier raises the chances of prohibitive duties that could slow competition and preserve profit margins for the U.S. aircraft maker, Bloomberg Intelligence analysts Caitlin Webber and George Ferguson said in a May 19 report.

Boeing says a 160 percent duty is needed to offset alleged price dumping and subsidies benefiting Bombardier’s C Series, which could double in price in the U.S., according to the report. Bombardier has dismissed the allegations, saying Boeing doesn’t manufacture a product that competes directly with the C Series.

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